Author

Cihan Likogullari

Published

15 December 2025

Estimated Read time

4Mins

A discussion with Cihan Likogullari, VP Sales EMEA & Global Key Accounts Pharma

1. What new technological advancements are shaping the air freight cool chain for pharmaceuticals?

Temperature-controlled logistics for pharmaceuticals are rapidly advancing, driven by emerging technologies and technological advancements, real-time monitoring capabilities, and stricter compliance demands for next-generation therapies.

Real-time monitoring has become a core component of air freight cold chain operations, offering visibility that helps reduce risks and maintain the integrity of temperature-sensitive products all the way to the patient.

There is also growing emphasis on sustainability within pharmaceutical logistics. Stakeholders are prioritising the reduction of CO₂ emissions, making lightweight and space-efficient transport solutions more critical than ever to support greener, more responsible supply chains.

2. How are pharmaceutical organisations building resilience in response to increasing extreme weather and geopolitical disruptions?

Supply chain disruptions can significantly impact the delivery of pharmaceutical products, with climate change creating increasingly unpredictable weather events such as flooding, landslides, and severe storms. Additionally, the ongoing geopolitical instability and economic uncertainty continue to pose major challenges for global logistics.

Extreme weather impacts air freight routes and requires collaboration across all stakeholders and the entire supply chain. To maintain resilience and efficiency, logistics providers must manage containers proactively and be ready to respond to a variety of disruptions. A one-size-fits-all approach is no longer viable, particularly as shipments may be exposed to freezing temperatures, high heat, and humidity within a single journey.

3. What new innovations are improving risk management, excursion tracking, or real-time intervention in the cool chain?

Over the recent years, providers have increasingly adopted digital tools, ranging from IoT and blockchain to AI, to improve transparency, reliability, and operational efficiency. Real-time monitoring is deeply embedded in cold chain solutions, offering greater visibility and reducing the risk of temperature excursions.

Adopting AI remains an evolving process in the industry. Small improvements lay the foundation for long-term success. Achieving this progress depends on close collaboration between pharmaceutical companies, logistics partners, and technology providers to ensure integration and continuous innovation.

4. How has end-to-end visibility evolved to improve overall resilience and assurance?

Ensuring the safe transport of pharmaceuticals has always been a top priority, not just for supply chain stakeholders but for patients who depend on life-saving medicines. As regulatory requirements tighten and supply chains become more complex, data transparency and real-time insights are increasingly essential to a product’s efficacy.

Post-shipment data has long been available to customers, helping speed up product release and ensuring timely delivery to patients. Combining real-time data with human oversight allows for issues to be prevented, giving customers full confidence in the integrity of their shipments.

5. How are regulatory expectations influencing cold chain practices?

Stricter regulatory oversight is reshaping cold chain practices. Technological innovations such as Phase Change Materials (PCMs) and Vacuum Insulated Panels (VIPs) enable consistent internal conditions and shield products from external influences during transit. These advances help contract development and manufacturing organisations (CDMOs) meet global GDP standards and comply with diverse regional regulations.

6. How is the pharmaceutical industry addressing its environmental impact?

The pharmaceutical sector is responsible for nearly 5% of global greenhouse gas emissions. Of this, 80–90% stem from Scope 3 emissions – those produced indirectly throughout the supply chain. Reducing Scope 3 emissions is complex, but crucial.

One way the pharmaceutical industry is combatting this significant contributor is through the continued innovation of packaging. Forever-use packaging has been gaining momentum in recent years as it has been engineered with reliability, longevity and sustainability in mind. With its extended lifespan, it’s a clear way for industry to reduce waste and lower their CO2 emissions.

7. How have partnerships and collaborations helped the industry build greater resilience and sustainability?

Strategic partnerships between pharmaceutical companies and CDMOs or CMOs are playing a vital role in strengthening resilience and sustainability across the industry. These collaborations enhance efficiency, lower costs, and provide access to specialist knowledge and advanced technologies that accelerate innovation and improve product quality. They also improve regulatory compliance and risk management, both critical to the successful delivery of complex treatments. By aligning resources and expertise, these partnerships create more agile, responsive, and future-ready supply chains.

Sustainability must be a central aspect in supplier and partner selection. By prioritising climate-conscious collaborators, pharmaceutical organisations can reduce emissions across the supply chain. Long-term partnerships rooted in shared environmental goals not only support compliance but also deliver financial and operational benefits. In an increasingly complex world, the future of pharmaceuticals will be shaped not just by innovation – but by the strength and depth of collaboration.

Author

Nell Walker

Published

25 November 2025

Estimated Read time

3Mins

Richard Hogg and Michael Van Keulen discuss what the business stands for and how it is shining a spotlight on tomorrow’s procurement department

Green Cabbage is more than just a memorable name; it’s a procurement intelligence company that promises to deliver. A company that lives and breathes its win-win business model. Richard Hogg is the Managing Director. He is, in his own words, responsible for “planting and growing the cabbage across Europe, the Middle East, and Africa”. Michael Van Keulen, Chief Procurement and Customer Officer, is new to the business. However, he’s brought with him over 20 years of supply chain experience, and calls himself a procurement “enthusiast”. 

The aim of Green Cabbage’s unique name is to keep money at the forefront of people’s minds. “Plant the cabbage, grow the cabbage; green cabbage is a colloquialism for money in some places,” explains Hogg. “Just like how, in the UK, we’d say ‘dough’. We’re trying to save our customers green cabbage.”

Forging relationships

Green Cabbage’s Founder and CEO, Eric Cunningham, created the business with a goal to try to rebalance the relationship between buyers and suppliers. “Effectively, Eric and his colleagues were looking at supporting the procurement community in preparation for negotiations, whether that meant pricing, non-price terms, or negotiation strategies,” says Van Keulen. “After three or four years, in 2019, they had amassed enough data to launch Green Cabbage. That’s how we were born. It was effectively a combination of really deep, broad data sets with subject matter expertise in core indirect categories.”

For Van Keulen, coming into a young company as a new recruit, he has the benefit of a fresh pair of eyes with plenty of expertise. “The challenge as a practitioner has always been that, on one side of the table, you’ve got a buyer; on the other side, you’ve got a seller. But how much information do I have as a buyer, and how can I ensure that I’ve optimised that contract, no matter my decision?” says Van Keulen. 

“It’s not even just about price, but also terms, conditions, limitation of liability, indemnification, and other elements of that contract. That’s why I decided to join this organisation. I’ve always been passionate about procurement and supply chain. I love this profession, the community, and I really feel like Green Cabbage has the ability to take procurement to the next level of maturity.”

Read the full story here.

Author

Charles Crossland

Published

4 August 2025

Estimated Read time

3Mins

Charles Crossland, Managing Director at Goodman UK, discusses the unique challenges the food supply chain is facing.

The food supply chain operates under unique pressures. With short product life cycles and a complex journey from source to shelf, it must navigate strict regulatory demands, price volatility, and increasing consumer expectations – all while maintaining speed, freshness, and traceability.

In recent years, global disruptions have exposed vulnerabilities. From reduced access to imported goods to increased transport costs, the sector has had to rapidly adapt. In response, many businesses are turning to technology and data-driven strategies to build resilience and agility into their supply chain operations.

Building resilience in a volatile market

Stock shortages are no longer unusual, and customers are increasingly aware of the fragility of food supply systems. There’s now greater scrutiny on how food moves through the supply chain and growing pressure on businesses to deliver consistency and transparency.

Businesses are adopting new technologies such as artificial intelligence (AI), predictive analytics, and automation to improve supply chain visibility and performance. AI-powered forecasting tools, for example, can help businesses respond faster to demand fluctuations, minimising waste and reducing risk.

At the same time, many have moved away from “just-in-time” approaches for non-perishable goods and are reassessing their sourcing strategies. Dual sourcing, diversified supplier bases, and increased inventory holding are helping to minimise risk and prevent single points of failure.

Smart logistics and strategic warehousing

The transport and distribution stages of the supply chain are also evolving. Soaring fuel prices, labour shortages, and carbon targets are forcing businesses to review delivery routes and optimise their warehouse networks. Proximity to customers is now more important than ever.

By investing in strategically located distribution hubs — close to major infrastructure and consumer populations — businesses can reduce lead times, optimise last-mile logistics, and cut transport-related emissions. 

All logistics operations, from warehousing to transport, are increasingly equipped with smart systems for real-time tracking, allowing for greater control over stock movement and condition. For temperature-sensitive goods in particular, the use of tracking sensors helps monitor freshness, reduce spoilage, and maintain product quality throughout transit.

Extending freshness through technology

Warehousing is undergoing a quiet revolution. Robotics and automated systems are now performing tasks such as picking, sorting, and packing with improved accuracy and speed. This is especially valuable in the food sector, where shelf life and freshness are key.

Technologies being deployed include:

  • Grading visibility systems which assess produce quality and reduce manual handling
  • Advanced freshness testing which pinpoints stages of ripeness with precision
  • Specialised climate control systems, including zoned heating and cooling, to maintain product quality

By reducing errors, extending shelf life, and improving product flow, these innovations contribute directly to reduced food waste.

Sustainability as a supply chain driver

Sustainability is no longer a nice to have — it’s becoming central to how supply chains are designed and operated. The environmental impact of food production and distribution is under growing scrutiny from regulators, retailers, and consumers alike.

Businesses are now expected to track and report on carbon outputs across their operations. Efficient route planning, electrified fleets, and eco-friendly packaging are just some of the areas seeing rapid investment.

Data is critical here too. By using detailed analytics, organisations can identify hotspots for energy use or waste and adjust operations accordingly. Many are now measuring not only emissions but also transport efficiency in a bid to reduce their environmental footprint.

Looking ahead: A tech-enabled, resilient future

Incorporating smart technologies into warehouse workflows and logistics strategies is already delivering benefits — from productivity gains to improved safety and fewer errors. But this is just the beginning.

As food supply chains grow more connected and responsive, businesses will need to continually adapt. The future will be shaped by those able to combine agility with long-term planning — embracing innovation, forming deeper supplier relationships, and keeping sustainability at the core.

Author

Mario van den Broek

Published

1 August 2025

Estimated Read time

4Mins

Mario van den Broek, Partner, RSM Netherlands, dives into regulatory fragmentation and how it’s affecting shipping.

The global shipping industry has reached a critical turning point.

The International Maritime Organization’s (IMO) recently agreed emissions deal has been hailed as a milestone in maritime decarbonisation – signalling long-overdue progress in regulating one of the world’s most polluting industries. But this breakthrough has been overshadowed by a stark omission: the United States’ decision to walk away from negotiations.

The US’s withdrawal raises serious questions about the enforceability and cohesion of the agreement. The IMO’s regulatory model relies on flag states to enforce compliance. If more nations opt out or water down their commitments, enforcement becomes inconsistent, and a two-tier shipping system could emerge: one made up of operators bearing the cost of compliance, and another of those operating under weaker or unenforced regimes.

More worryingly, it risks triggering a wider trend of regulatory fragmentation – with significant consequences for manufacturers, logistics providers and supply chains around the world.

Why is this a setback for companies?

For global businesses, consistency and predictability in regulation are critical. Fragmentation in maritime decarbonisation policy disrupts both. Without a unified global standard, companies must navigate a patchwork of national or regional rules – each with different timelines, thresholds and enforcement regimes. This not only creates legal and operational uncertainty but also increases the cost and complexity of compliance.

Companies that rely on international shipping, especially manufacturers, exporters and retailers, may be forced to choose between higher-cost compliant carriers or risk reputational and regulatory exposure by engaging non-compliant operators. Those costs will not be evenly distributed.

Firms operating across multiple markets may find themselves juggling multiple emissions reporting systems, carbon pricing mechanisms and verification requirements. For small and mid-sized businesses in particular, these added burdens could squeeze margins and dampen competitiveness.

There are also strategic risks. A lack of coherence in shipping policy makes long-term supply chain planning more difficult. For example, businesses that have invested heavily in decarbonisation may now hesitate to go further if they perceive competitors, especially in markets with looser regulation, are gaining an unfair advantage. This could stall progress not just in shipping, but across adjacent sectors that depend on it, from automotive to consumer goods.

The US’s decision to walk away from the IMO negotiations weakens the political legitimacy of the agreement and signals to others that opting out is a viable path. In doing so, it undermines the collective action needed to decarbonise global trade routes. The result is a business environment marked by growing divergence – where resilience is replaced by reactivity and climate ambition is undercut by regulatory uncertainty.

How can companies turn this into a strategic advantage?

While the policy landscape remains uncertain, companies can still take practical steps to prepare for change. Carbon pricing is beginning to influence shipping costs in some markets, and businesses that assess the potential impact early may be better placed to respond. This includes reviewing freight strategies, factoring potential carbon levies into budgeting and setting clearer sustainability expectations for suppliers.

Some organisations are already exploring options to reduce emissions within their supply chains, such as selecting carriers that use alternative fuels like LNG, biofuels or methanol. Manufacturers are responding too, choosing greener carriers, shortening transport routes and investing in digital tools to track and report emissions.

Moreover, embedding sustainability into core decision-making – rather than treating it as a separate or reactive issue – will help companies manage regulatory risk, meet stakeholder expectations, and identify areas for operational improvement. This not only helps them build more resilient supply chains but also aligns with rising customer expectations and investor pressure for greater environmental accountability.

Businesses must not only adapt to regulation but engage constructively in the development of future standards. By contributing insights and maintaining dialogue with industry groups and policymakers, businesses can play a role in shaping a more coordinated, transparent framework for decarbonising global shipping.

Looking ahead

The carbon divide is set to disrupt global trade. As nations diverge in their approach to maritime decarbonisation, companies will increasingly find themselves navigating a fragmented landscape that distorts competition and complicates compliance. But fragmentation doesn’t have to mean paralysis.

By preparing now, engaging constructively, and embedding sustainability into supply chain strategy, businesses can not only mitigate risk but also help shape more stable and predictable conditions for global trade.

Author

Andrew Woods

Published

16 July 2024

Estimated Read time

7Mins

Supply chain 4.0 – where preparedness and opportunity meet in the digital supply chain 

Supply chains matter. One break in the link and manufacturers can be left with costly disruptions that bring the entire operation to a standstill – and the problem isn’t going away soon. According to McKinsey research, disruptions lasting a month or longer now happen every 3.7 years on average. Whether it is issues securing raw materials, a steep rise in shipping costs, labour shortages, geopolitical conflicts, or sustainability concerns, the pressure is mounting on manufacturers to diversify their supplier partnerships and introduce more flexible operations. For manufacturers determined to create more resilient supply chains, Andrew Newton, Business Central Consultant at Columbus UK, argues that a digital transformation of supply chains will be integral to the industry’s ongoing survival. 

Industry 4.0 has been the main driving force behind recent supply chain transformation with the introduction of IoT technologies such as cloud, data analytics, and AI throughout the manufacturing ecosystem. This includes smart factories that enhance manufacturing with Industry 4.0 tech and smart products offering internet-based services. 

It’s now time for the supply chain to step up to the 4.0 digital plate. Market leaders, particularly in the automotive and electronics sectors, have already launched digital transformation initiatives to establish flexible and high-performing supply chains. And manufacturers of all sizes can learn from their example on how to achieve sustainable change. 

When disruption is constant, an organisation’s preparation for supply chain changes will provide a significant competitive advantage. From effective data connectivity to reshoring operations, operationalising AI, and implementing a long-term sustainability agenda – successful manufacturers must be able to incorporate these factors into supply chains to drive innovation and redefine how products are created, developed, and delivered to meet evolving consumer demands. 

Unearth actionable findings within the data haystack 

Many businesses now have extensive data archives spanning several years, including substantial sales orders and operational performance records but the ability to extract maximum value from this data remains a common challenge. Manufacturers want to establish robust connections with shop floor assets to unlock enhanced operational efficiency and make more informed decisions. However, many lack the data-related skills to successfully link their machinery or manage the influx of data streams from sensors. 

This is where the introduction of business intelligence dashboards with Supply Chain 4.0 can offer real-time production insights to inform decisions, boost efficiency, cut costs, and refine product quality. 

The convergence of operational technology (OT) and information technology (IT) adds to the data challenge, particularly where legacy equipment is still in use. It is important to recognise that the solutions being implemented require tailored approaches due to the unique demands of each manufacturing organisation. Developing applications within a business can be tricky, with not every business having the in-house data skills to do this. 

Custom applications that don’t require extensive coding expertise can address this digital skills gap. Versatile solutions that combine low-code services, self-service analytics, and automation for instance, can make it easier for manufacturers to create applications that precisely align with their specific needs, boost efficiency, and innovate in the process. The establishment of a reliable data environment with Supply Chain 4.0 ensures that manufacturers can enhance decision-making and operational efficiency, all while reducing costly errors. 

Operationalise AI to stay one step ahead 

AI has left a mark on every industry and when it comes to the manufacturing landscape, the story is no different. Already many businesses are using AI tools to process real-time data from shop floor sensors to provide manufacturers with immediate insights and action, especially if quality measures breach thresholds. But the capabilities of AI don’t stop at detection. 

Manufacturers must consider many factors in production and delivery, such as demand versus capacity and how much materials cost along the supply chain – and this is where unsupervised AI can be a useful tool for risk identification and market trend forecasting. 

For instance, AI can suggest preferred suppliers to purchase from based on their supply chain history or issue alerts for impending weather events affecting supply chains. Social media analytics enabled by AI can also be used to project patterns to better understand where the market is heading but it can’t fully predict the future. Instead, the role of AI with Supply Chain 4.0 is to help manufacturers identify shifting consumer interests and trends, spot market trends relating to offerings or brand, and forecast waning or growing interest in product types. 

I want it now! Proximity sourcing can help meet customers’ changing expectations 

As supply chain disruptions become part of the new business environment, it’s time for manufacturers to end the reliance on disparate and siloed operations and instead look to nearshoring as the answer. 

Customer expectations around delivery times are changing, with 62% of UK consumers now expecting next-day delivery when ordering online – an expectation that traditional offshoring business operational models now struggle to match. Yes, regional or local supply chains can be more expensive and add another level of complexity, but they do allow for greater inventory control and bring the product closer to the end customer, which reduces overall lead times. This reduction with Supply Chain 4.0 ensures that manufacturers can promote higher customer responsiveness and allows for constant improvement and innovation based on consumer feedback. 

Nearshoring also provides an opportunity to clamp down on miles covered and will help manufacturers introduce a circular approach to operations. With over 4 in 5 UK adults recognising their role in lessening their environmental footprint, it is clear that the manufacturing industry needs to mirror this popular attitude – and technology will play a key role here. Automation techniques for instance can improve traceability and visibility over the entire product line, highlighting how businesses use and waste materials, along with how they can reuse products for better forecasting and reduce fossil fuel usage and pollution. 

Particularly in the food industry, conscious consumers will base their buying behaviour on transport miles and the environmental impact of the product’s journey. If manufacturing businesses are able to clearly share this information with transparent supply chains, they will not only open themselves up to a larger customer pool but will also play a major role in tackling environmental challenges in the industry. 

Long-term commitment to sustainability goals 

Nearshoring is certainly one way that manufacturers can become more sustainable but with customer sustainability expectations rising, companies now have to show a long-term commitment to creating greener supply chains. 

Many businesses are making efforts to report on internal sustainable efforts such as energy consumption but extending reporting down the supply chain poses challenges, such as effectively reporting on a supplier’s energy usage. To achieve a comprehensive sustainability profile, this reporting must span the entire supply chain. 

Supply Chain 4.0 brings sustainability reporting tools that provide comprehensive tracking and analysis of environmental and social impacts, which will enable manufacturers to make informed decisions, ensure regulatory compliance, and communicate sustainable practices transparently. Manufacturers are looking to achieve this connectivity, particularly in linking shopfloor equipment usage with sustainability goals. 

Leading organisations are pushing for data standardisation among their supply chain suppliers but this brings its own set of pros and cons. Increased standardisation can make the supply chain more efficient and easier to review, potentially reducing a company’s risk. However, there’s more work needed to establish this standardisation. 

As public and regulatory interest grows, having a clear view of supply chain processes will become even more important. In the short-term, expect leading companies to keep investing time and effort to better organise their supply chain data. 

Supply Chain 4.0 – where preparation and opportunity meet in the digital supply chain 

Digital transformation is a long and complex journey but preparedness plays a key role in achieving optimal outcomes. Through the process of transformation, manufacturers can more effectively adapt to ever-shifting business conditions and evolving customer demands with Supply Chain 4.0, all while maintaining a competitive edge. 

The issue remains that each manufacturer faces their own unique scaling challenges that require a calculated approach to processes, planning, and implementation to create a sustainable business model. Often companies have growth ideas but lack a clear path to achieve them. The identification of key supply chain trends will set apart the laggards from the market leaders

Read the full issue of SCS here!

Author

Andrew Woods

Published

Estimated Read time

4Mins

Businesses have been forced to navigate and adapt to these challenges to ensure continuity, limit interruption and reduce risk

From Brexit to the pandemic and the current geopolitical conflict, the supply chain industry has faced a flood of challenges in recent years. This has caused disruption to supply chains. Businesses have been forced to navigate and adapt to these challenges to ensure continuity, limit interruption and reduce risk. 

Alice Strevens, Director Human Rights and Social Impact, Mazars 

As part of this, it’s increasingly important for businesses to ensure they have robust human rights due diligence processes in place. These processes support companies in their decision-making during crises, and help them identify risks in their supply chains. This ultimately protects them in both stable and unstable times. 

Human rights and environmental due diligence provides a basis on which to address environmental, social and governance issues that impact supply chain resilience. Companies that respond to crises with an approach based on due diligence are more likely to protect their relationships with suppliers. Plus, they get to mitigate the impact on workers in their value chain. An example of this is during the Covid-19 pandemic. Many companies saw buyers abruptly cancel orders, request refunds in full and pause orders for months. With many suppliers facing reduced sales at the time, it led to questions as to whether businesses were working alongside suppliers. Or taking advantage of the circumstances to get reduced costs. 

It’s important to learn from these lessons to build strong sustainable supply chain strategies. This will help businesses remain resilient both in stable times. And in the face of significant events. There isn’t a perfect formula. However, the concept of double materiality (i.e. considering sustainability matters from both the perspective of the impact on people and the environment, and the perspective of the financial risks and opportunities to the business) is helping businesses to assess sustainability-related risk strategically.  

Supplier engagement will ensure long-term success 

Building a sustainable supply chain for the long-term requires engagement and collaboration with supply chain partners. Long-term relationships can provide a basis to share challenging risks and impacts transparently. Human rights and environmental due diligence foregrounds the importance of engagement and collaboration to mitigate identified risks and build resilience. 

The responsible supply chain strategy should be integrated into the overarching sourcing strategy and supplier engagement approach. Delivery against the strategy should be built into performance targets and incentives. Regular reviews of impacts, targets and KPIs should be conducted at board level. Making use of the latest technological developments, including assessing their risk for social/environmental concerns and measuring and tracking performance. This will help companies stay ahead and be prepared in their processes. 

An evolving regulatory landscape calls for preparedness 

Another important point to keep in mind is the legislative landscape. This is especially pertinent in the EU, as the rules will make previous voluntary standards now mandatory and will impact large companies. This includes those in their supply chain, including in the UK. 

Companies should therefore look to base their strategies on the authoritative voluntary frameworks on conducting human rights and environmental due diligence. Primarily the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. This will set them up for meeting legislative requirements down the line. For example, Mazars and Shift co-wrote the UNGP Reporting Framework, which provides a framework for companies to adopt responsible practices, and manage human rights risks. 

The future of supply chain is now 

Ultimately, companies and suppliers should work together to ensure collaboration and a robust strategy which takes all parties into consideration. Listening to feedback and promoting good communication between stakeholders will ensure smooth sailing during the business-as-usual times. And the more tumultuous periods. 

Implementing long-lasting strategies and creating resilience to risks will increase business’ market access and promote their financial value. Thus ensuring that they deliver quality goods and gain loyalty among suppliers. 

Read the full issue of SCS here!

Author

Andrew Woods

Published

18 June 2024

Estimated Read time

5Mins

Our cover story this month…  Marriott International Inc: A more sustainable supply chain  With science-based targets approved, Marriott is accelerating…

Our cover story this month… 

Marriott International Inc: A more sustainable supply chain 

With science-based targets approved, Marriott is accelerating work to help make its supply chain more sustainable. We speak to Stéphane Masson, Senior Vice President, Procurement, Marriott International, Inc. – for our exclusive cover story this month – to find out how… 

“Like many global companies, Marriott recognises that serving our world helps the communities where we operate and is also good business,” Masson tells us. “This Earth Day, we announced the approval of our near-and-long-term science-based emissions reduction targets by the Science-Based Targets initiative (SBTi), with a goal to reach net-zero greenhouse gas (GHG) emissions by no later than 2050. Approval of these targets is bringing heightened focus on our work to embed sustainability in our operations.  

Specifically, the company has committed to reduce absolute scope 1 and 2 GHG emissions 46.2% by 2030 from a 2019 base year. Marriott also commits to reduce absolute scope 3 GHG emissions from fuel and energy-related activities, waste generated in operations, employee commuting, and franchises 27.5% within the same timeframe.  

Importantly for our team and the suppliers we work with across the globe, Marriott’s targets include 22% of our suppliers by emissions—covering purchased goods and services, capital goods, and upstream transportation and distribution—which will have science-based targets by 2028. 

In the longer term, Marriott also aims to reduce absolute scope 1 and 2 GHG emissions 90% by 2050 from a 2019 base year and reduce absolute scope 3 GHG emissions 90% within the same timeframe.  

Our Global Procurement organisation plays an important role in setting up Marriott as we work to achieve the targets within this timeline. And it will require an evolution in how we engage Marriott associates, our suppliers, and other members of the industry.” 

Read the full story here! 

Grupo Modelo: Procurement and sustainability in action! 

We speak to Soqui Calderon, Regional Director of Sustainability for Grupo Modelo and the Middle Americas Zone, to see how the beverage giant is tackling sustainability from a procurement perspective… 

Grupo Modelo is a giant. A leader in the production, distribution and sale of beer in Mexico, Grupo Modelo is part of the Middle America Region (of the AB InBev Group) and boasts 17 national brands, among which are Corona Extra, the most valuable brand in Latin America, as well as Modelo Especial, Victoria, Pacífico and Negra Modelo. The company also exports eight brands and has a presence in more than 180 countries while operating 11 brewing plants in Mexico. 

Through more than nine decades, Grupo Modelo has invested and grown within – and with – Mexico, generating more than 30,000 direct jobs in its breweries and vertical operations, located throughout the country. 

Grupo Modelo, like many forward-thinking companies, is currently focused on a drive towards establishing a truly sustainable business. This endeavour is best exemplified in the Middle Americas Zone (MAZ), where sustainability efforts have been led by for the past five years by Soqui Calderon Aranibar, Regional Sustainability and ESG Director. Ambitious targets have been established for the region, but some remarkable achievements have already been made. As Calderon says: “For our team, sustainability is not just part of our business, it IS our business.” 

Read the full story here! 

SDI International: Delivering tail spend excellence 

SDI International’s Brendan Curran and Joaquín Morales discuss empowering procurement innovation, the importance of effective tail spend management, and how its Master Vendor programme transforms the function 

In a world of greater complexity and risk, technology adoption and digitalisation, and an ever-evolving compliance and regulatory environment, procurement teams still grapple with a perennial challenge: cost reduction. Which is why tail spend management – often overlooked and unmanaged while procurement focuses its attention on strategic, high-spend categories – is so important. Indeed, for many organisations, taking effective control of costly, one-off buys and high-volume, low-value purchases involving numerous suppliers can deliver as much as 5% to 10% of cost savings, according to Boston Consulting Group. 

But tail spend, by its nature, is complicated. It requires significant focus to effectively manage high volumes of data, often has a perceived lack of strategic importance within both procurement and the wider organisation, lacks visibility, involves vast numbers of transactions, many product categories, and a largely anonymous supplier base, and can bring potential compliance risks because of poor onboarding processes or inconsistent terms and conditions.  

Tackling the problem can be daunting for procurement teams. But, according to SDI International, it doesn’t have to be. The organisation, one of the world’s largest diversity and woman-owned procurement outsourcing and technology providers, delivers industry-leading holistic tail management solutions based on a successful formula: simplify, digitalise, innovate. Its Master Vendor programme provides procurement teams looking to tackle their tail with a one-stop solution for tail spend that leverages the latest and most efficient technologies to handle supplier onboarding and on-time payment, and manage the entire tail supply chain, stakeholder servicing, and escalations. The result is a procurement department better able to drive cost saving, efficiencies, and more strategic outcomes.  

Read the full story here! 

Author

Sean Galea-Pace

Published

8 May 2024

Estimated Read time

8Mins

Anthony Payne, Chief Marketing Officer of HICX, tells us how working collaboratively with suppliers on sustainable procurement practices could act as an organisation’s competitive advantage.

Sustainability isn’t just a ‘nice to have’ anymore – businesses don’t have much of a choice in the world of 2024.

With ESG regulations now locked in place, organisations must comply or risk significant penalties. In order to achieve sustainability objectives more effectively and efficiently, collaborating with suppliers represents a real opportunity to get there faster.

When businesses work with suppliers to reach sustainability goals, they need access to the most accurate supplier data possible. However, obtaining this data isn’t necessarily straightforward. Ultimately, suppliers own it and need to provide it.

This means it is in a business’s interest to form and maintain a great working relationship with suppliers.

Anthony Payne, Chief Marketing Officer of HICX, the supplier experience platform, discusses the benefits of being supplier-centric and how giving brands a better experience adds value to organisations.

Anthony Payne: “There is a direct link. A good supplier experience makes it easier to communicate with suppliers because it allows for collaboration, whereas the opposite can harm communication efforts. For example, when businesses need ESG information, many will survey a broad group of suppliers even though the questions don’t apply to everyone. This is easier for the business. But it means every supplier who receives the survey must investigate whether it applies to them. The experience is more likely to frustrate suppliers than to help them offer the best information.

“Rather, we can help suppliers to help us by communicating better. The way forward is to segment suppliers into groups and send them only relevant requests. This creates a more positive experience in which suppliers are better able to provide helpful information.”

What about their motivation to help sustainability efforts – does this also rely on supplier experience?

Anthony Payne: “Yes, because if the culture of the business-supplier relationship is one in which each party looks out for themselves, then suppliers won’t be terribly motivated to offer the most helpful ESG information. It’s just human nature. Whereas if a business creates an environment in which suppliers can collaborate with them, then they’re more likely to become a customer-of-choice. This is a status worth having. A recent HICX survey showed that while 49% of suppliers would go the extra mile for their biggest customer, as many as 73% would make the effort if this was a customer-of-choice.

“Ultimately, if businesses give their suppliers a good experience, then more suppliers should be willing to provide helpful ESG information – even if it means spending a bit more effort.”

Anthony Payne, Chief Marketing Officer of HICX

What are some of your most effective strategies and best practices to building a future-proof ESG framework?

Anthony Payne: “Businesses can futureproof their ESG frameworks by viewing suppliers as value-adding partners. This principle suggests three ways to engage suppliers…

“First, have a corporate mindset in which every employee views every supplier as a valued partner. If COVID-19 taught us anything it’s how much we rely on suppliers. When the pandemic hit, non-strategic suppliers such as providers of IT equipment and protective personal equipment suddenly became as central to operations as those who supplied the main ingredients. If we take the view that ‘all suppliers matter’, then it becomes easier to treat them all as partners in the same eco-system and we can work together towards common goals.

“Then, through this lens, we can market to suppliers. In customer marketing, a business would require a certain action from customers – such as getting them to buy a product, read a newsletter or attend an event – and so would motivate this behaviour. Similarly, in procurement, we can appeal to suppliers in a way that encourages them to participate in ESG activities, for instance, by providing helpful carbon emission information. 

“One way to encourage the desired behaviour with suppliers is to segment them into the appropriate categories and send them only necessary messages. This is what a marketer would do with customers. By viewing suppliers as partners and introducing supplier marketing and segmentation, you can improve suppliers’ experience and get the most from them.”

What are the biggest barriers that organisations face to delivering more sustainable practices within their organisations?

Anthony Payne: “Once supplier data has been captured, however, the challenge continues because it must be maintained as a golden source of truth. Not having accurate supplier data is a major barrier to delivering sustainable practices because it means that businesses cannot see who all their suppliers are and what they’re doing. 

“Thankfully, with robust onboarding and data management in place, businesses can keep their supplier data up-to-date and accurate so that it can inform good sustainability decisions.”

What is the best way for procurement teams to assess and prioritise the suppliers they work with? How do you juggle environmental impact vs value to company?

Anthony Payne: “The best way to assess and prioritise suppliers is to have visibility. Businesses need to know who all their suppliers are and what they’re doing, at any given time. Only once leaders are informed, can they make the best environmental decisions.

“It’s imperative to manage environmental impact with suppliers, regardless of how much value they bring a company. Apart from the moral obligation to protect the environment, businesses also have their reputations to consider. An environmental infringement that gets exposed – no matter how deep in the supply chain it might occur – is very likely to cause reputational damage, which can have a knock-on effect on sales and share price. 

“In addition to brand reputation, businesses can also face expensive fines, if their suppliers are found to fall short of environmental regulations.”

Anthony Payne, Chief Marketing Officer of HICX

What are the challenges and opportunities when it comes to supplier diversity?

Anthony Payne: “The challenge is to source the right suppliers in the first instance and then be able to report on their activity. We know that finding diverse suppliers in the UK can be difficult. While the US market is more mature, supplier diversity is growing here. Considering this, many suppliers that could qualify as “diverse” are not yet certified. Additionally, when diverse suppliers are indeed certified, there is no guarantee that their skillsets will match your needs. 

“Thankfully there are ways in which businesses can proactively grow their networks of diverse suppliers. For starters, leaders can equip people within the organisation who work with suppliers, to find diverse suppliers by educating them and putting policies in place. Further, there are practical steps one can follow – such as defining the criteria for what qualifies a supplier as diverse in various territories and then finding the right businesses by searching online directories, desktop research and asking for recommendations.

“Once suppliers that are considered to be diverse are indeed found, they bring much value. Apart from being able to make a positive sustainability impact, the expectations of regulators, shareholders and consumers can be met. The by-product of this is a positive reputation which has economic benefits. 

“The opposite logic also applies, and failing to capture supplier diversity value becomes a missed opportunity. For instance, when third-party expectations to support supplier diversity are missed, this can damage brand reputation which hurts sales figures and share price. Also, the unique offerings that diverse suppliers can offer will be missed, and with it the chance to make an impact. Therefore, it’s sensible to make the most of the diverse suppliers that you worked so hard to find.”

Do you have any tips for readers who want to make the most of the diverse suppliers they have sourced?

Anthony Payne: “Yes, you can start by knowing that it’s possible to make the most of the diverse suppliers you find. You can do this by following a stepped approach. 

“Start by onboarding new suppliers who are considered ‘diverse’ with processes that reliably capture their information. This way, your diversity programmes can be well-informed. It’s hugely valuable to be able to tell, at the touch of a button, where a particular supplier might be based. Also, what qualifies them as ‘diverse’? And while they might hold diversity status today, how can we be sure it still applies tomorrow? 

“With all the right information collected at the start of each relationship, then it’s a good idea to instill processes that drive everyone who works with suppliers to spend more with those who are considered as diverse. As more diverse suppliers join the organisation, then you need to keep their data accurate. Do this by digitally transforming the procurement landscape to make master data a priority. With robust processes, it’s possible to maximise your relationships with all suppliers.”

How optimistic are you about the future of ESG within procurement?

Anthony Payne: “I am very optimistic about the future of ESG within procurement, because, we’re seeing the supplier experience movement grow in the UK and the US. For instance, we’re seeing new job roles come out in this area as the principle is popularised. And we know that having good Supplier Experience Management programmes in place sets up business to procure in the most ESG-friendly way possible. 

“And so, with Supplier Experience Management becoming increasingly popular, we believe that the future for sustainability is bright.”

Read the latest CPOstrategy here!